RBA leaves rates on hold

The Reserve Bank of Australia (RBA) has left the official cash rate unchanged at 2% at its September board meeting.

Announcing the decision, RBA governor Glenn Stevens said leaving rates on hold was appropriate at this point in time.

“Further information on economic and financial conditions to be received over the period ahead will inform the board’s ongoing assessment of the outlook and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target,” Mr Stevens said.

The decision to leave rates on hold was broadly predicted by market analysts as inflation has remained in check and growth remained moderate.

Mr Stevens said monetary policy would need to be accommodative and that low interest rates were acting to support borrowing and spending as credit was recording moderate growth.

“In Australia, most of the available information suggests that moderate expansion in the economy continues,” he said.

“While growth has been somewhat below longer-term averages for some time, it has been accompanied with somewhat stronger growth of employment and a steady rate of unemployment over the past year.”

Mr Stevens noted that the global economy was recording moderate growth with conditions in China slightly softening while the US was experiencing stronger growth.